Listed banks in the GCC achieved a new record high in net income during Q2 2024, with four out of six country aggregates showing growth compared to Q1 2024, according to the GCC Banking Sector report. Aggregate net profits rose to $14.8 billion from $14.4 billion in the previous quarter, marking a 2.6% quarter-on-quarter increase. Year-on-year growth stood at a robust 9.2% compared to Q2 2023, as reported by Kamco Invest.
The primary contributor to the sector's bottom-line performance was a significant reduction in quarterly impairments recorded by banks in the region. Total loan loss provisions hit their lowest point in at least 33 quarters at $1.9 billion, indicating a strengthening economy and credit quality. This also reflects the improving loan portfolios over recent years, as evidenced by a consistently falling non-performing loan rate, according to Junaid Ansari, head of investment strategy and research at Kamco Invest.
The report highlighted that with central bank interest rates in the GCC remaining stable during the quarter, net interest income reached a new peak at $21.5 billion, slightly up from $21.3 billion in Q1 2024. Non-interest income dipped slightly to a three-quarter low of $10.1 billion. Consequently, aggregate bank revenue for Q1 2024 was $31.6 billion, showing a modest 0.4% quarter-on-quarter growth.
Data from GCC central banks indicated increased quarter-on-quarter lending across all country aggregates. Aggregate gross loans by listed banks in the GCC hit a new record high of $2.1 trillion, reflecting a 2.1% quarter-on-quarter increase and a 7.9% year-on-year growth. UAE banks led in quarter-on-quarter gross loan growth at 3.4%, driven by robust retail lending, followed by Saudi-listed banks with a 3.1% growth to $711.1 billion.
Conversely, customer deposits for GCC-listed banks slightly declined by 0.5% during the quarter, primarily due to decreases in customer deposits reported by SNB and a drop in deposits in Bahrain following the delisting of Al Baraka Banking Group. The data from GCC central banks underscored the resilience of regional economies, with continued growth in credit facilities. Outstanding credit facilities in the region grew during Q2 2024, driven by broad-based growth across seven country aggregates. Saudi Arabia saw a double-digit year-on-year growth in outstanding credit facilities at 11.4%, while Qatar's banks recorded a 5.5% year-on-year growth.
